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Bill Bennett

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Lack of innovation hurts phone makers

Galaxy S7There are signs the lack of innovation in recent times is hurting phone makers.

Reuters reports from Seoul:

Samsung is expected to post its smallest profit growth in more than a year in the second quarter, as lackluster sales of its premium Galaxy smartphones overshadow its highly profitable chip business.

Analysts expect Samsung’s smartphone sales to drop in the April-June quarter, following a more than 2 percent drop in the previous quarter as consumers flock to cheaper models from Chinese rivals such as Xiaomi Corp.

Samsung’s lead over Apple in the global smartphone market is under pressure after the U.S. firm’s iPhone X exceeded market expectations while a lack of technological innovation dogs Samsung offerings.

“Functions (that) Samsung’s mobile phones have are not attractive enough for customers to spend more money on,” said Song Myung-sup, analyst at HI Investment & Securities.

It’s not just Samsung, other phone makers are rubbing up against the same issue. We’re on the top, flat part of the innovation S curve as far as the current generation of phones are concerned.

Phone makers go on improving cameras and bumping speeds. Yet there hasn’t been an improvement that makes a significant difference for at least three years. A better camera, smaller bezel or a library of childish emoji is not innovation, it’s window dressing.

Why upgrade?

For most people that means no pressing reason to upgrade.

At the same time, cheaper phone brands have caught up to the point where they now offer all the essential features at a lower price. In some cases that’s a much lower price. If you own a three year old Android phone from a top brand like Samsung you can swap it for better technology and pay half what you paid for your existing model.

We’ve been here before with the PC and no doubt we’ll be here again. Stable designs are not necessarily a bad thing for consumers, but they kill hardware company profits.

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